The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[muppet]

so whats the situation muppet these scum have already raided the pensions money? wtf! WTF! WHY AREN'T THESE GUYS IN JAIL. the pensions money is the money that the shinners intend to use on projects to stimulate the economy should the good people of ireland grant them a mandate.

There were rumours it was gone weeks ago, but it definitely is gone now. We are supposed to believe it is being lent to us at 5.8% as part of our own Bailout. This is precisely the sort of opaque financial transaction that got us into the mess in the first place.

[lawnseed]

your right, just watching the news... so much for stimulating the economy. heres lenahen... great news we're better than greece plain to see who called the shots the biffo bunch hadn't a word to say

[bcarrier]

A slow liquidation of the state has begun.

Cowen and Co's acceptance that europe would not accept a haircut on senior bonds is shocking.

[muppet]

http://www.nytimes.com/2010/11/26/opinion/26krugman.html?_r=1&partner=rssnyt&emc=rss

Eating the Irish
By PAUL KRUGMAN
Published: November 25, 2010

What we need now is another Jonathan Swift.


Most people know Swift as the author of "Gulliver's Travels." But recent events have me thinking of his 1729 essay "A Modest Proposal," in which he observed the dire poverty of the Irish, and offered a solution: sell the children as food. "I grant this food will be somewhat dear," he admitted, but this would make it "very proper for landlords, who, as they have already devoured most of the parents, seem to have the best title to the children."

O.K., these days it's not the landlords, it's the bankers — and they're just impoverishing the populace, not eating it. But only a satirist — and one with a very savage pen — could do justice to what's happening to Ireland now.

The Irish story began with a genuine economic miracle. But eventually this gave way to a speculative frenzy driven by runaway banks and real estate developers, all in a cozy relationship with leading politicians. The frenzy was financed with huge borrowing on the part of Irish banks, largely from banks in other European nations.

Then the bubble burst, and those banks faced huge losses. You might have expected those who lent money to the banks to share in the losses. After all, they were consenting adults, and if they failed to understand the risks they were taking that was nobody's fault but their own. But, no, the Irish government stepped in to guarantee the banks' debt, turning private losses into public obligations.

Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation's creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.

Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

Or to be more accurate, they're bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks' debts, the Irish are suffering from plunging incomes and high unemployment.

But there is no alternative, say the serious people: all of this is necessary to restore confidence.

Strange to say, however, confidence is not improving. On the contrary: investors have noticed that all those austerity measures are depressing the Irish economy — and are fleeing Irish debt because of that economic weakness.

Now what? Last weekend Ireland and its neighbors put together what has been widely described as a "bailout." But what really happened was that the Irish government promised to impose even more pain, in return for a credit line — a credit line that would presumably give Ireland more time to, um, restore confidence. Markets, understandably, were not impressed: interest rates on Irish bonds have risen even further.

Does it really have to be this way?

In early 2009, a joke was making the rounds: "What's the difference between Iceland and Ireland? Answer: One letter and about six months." This was supposed to be gallows humor. No matter how bad the Irish situation, it couldn't be compared with the utter disaster that was Iceland.

But at this point Iceland seems, if anything, to be doing better than its near-namesake. Its economic slump was no deeper than Ireland's, its job losses were less severe and it seems better positioned for recovery. In fact, investors now appear to consider Iceland's debt safer than Ireland's. How is that possible?

Part of the answer is that Iceland let foreign lenders to its runaway banks pay the price of their poor judgment, rather than putting its own taxpayers on the line to guarantee bad private debts. As the International Monetary Fund notes — approvingly! — "private sector bankruptcies have led to a marked decline in external debt." Meanwhile, Iceland helped avoid a financial panic in part by imposing temporary capital controls — that is, by limiting the ability of residents to pull funds out of the country.

And Iceland has also benefited from the fact that, unlike Ireland, it still has its own currency; devaluation of the krona, which has made Iceland's exports more competitive, has been an important factor in limiting the depth of Iceland's slump.

None of these heterodox options are available to Ireland, say the wise heads. Ireland, they say, must continue to inflict pain on its citizens — because to do anything else would fatally undermine confidence.

But Ireland is now in its third year of austerity, and confidence just keeps draining away. And you have to wonder what it will take for serious people to realize that punishing the populace for the bankers' sins is worse than a crime; it's a mistake.

[bcarrier]

excellent article muppet.

[muppet]

excellent article muppet.

Sad that we have to look to foreign journalists to tell it as it is.

[BennyHarp]

My apologises if this has been posted before, I thought it was interesting.

How a bailout package works

It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt and everybody lives on credit.
On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.
The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub.
The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the same €100 note.
The hotel proprietor then places the note back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the stairs, picks up the note, states that the rooms are not satisfactory, pockets the money and leaves town.
No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.
And that, ladies and gentlemen, is how a bailout package works. 

[Declan]

Indeed it is- RTE are Pravda/Izvestia light. This is an absolute disgrace but we still have the opportunity to change things - Vote these lliars, cheats and bastards out of office and tell the new govt to tell the ECB/IMF to go f**k themselves

[armaghniac]

On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note

The above has a ring of truth. All the ECB has to do is print vouchers for tourist services and give them to Germans who can head off to Ireland, Portugal, Greece and Spain on holidays, thereby filling empty hotels and removing the need for Germany to lend money.

[lawnseed]

jez benny thats an old one . actually i heard one of the fine gael senators suggest that the state buy 1 million plane fares from ryanair who he said would sell the seats at 7 euros each which we could give to tourists for free. i was surprised that fine gael senators were capable of such ideas very innovative for a change

[bcarrier]

How a bailout package works

It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt and everybody lives on credit.
On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.
The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub.
The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the same €100 note.
The hotel proprietor then places the note back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the stairs, picks up the note, states that the rooms are not satisfactory, pockets the money and leaves town.
No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.
And that, ladies and gentlemen, is how a bailout package works.

Wrong in ireland. The german tourist has also asked persuaded the owner that if he books the room for 100 euro that the owner will give an immediate unrefundable 50 euro cashback to the tourist's german cousin in the bank.

[seafoid]

Bailing out bondholders in't capitalism.

Fianna Fáil are going to DIE as a party. They have shorted themselves. What an appalling situation they leave the country in.

Why not divvy the NPRF up between 4.3 million people and get everyone spending?  I mean if they don't want the money.

The protection of bondholders is shameless. They are going to lose their money anyway later on but shafting the taxpayer in this way goes against all the values of the Irish nation, apart from the Sunday Independent. 

[lawnseed]

give rte a few weeks to spin this 'deal' to the 'stupid' irish public and they'll be patting cowen on the back. if the french government tried this their heads would be kick off the top of the effiel tower to the sound of tumultous applause of the french people. the irish will simply bendover..

[Zapatista]

The Irish Government just accepted a deal to sell Ireland to bailout Europe.

This is bigger than the 1916 rising.

[lawnseed]

vasaline sales are up...